The Russia houses

A Dagestani politician isn’t telling the truth about his Wikileak-ed connections to Carlsbad

The Army and Navy Academy in Carlsbad was highlighted in a secret memo on Dagestani politics published by Wikileaks. - Photo by David Rolland

In 2006, an official in the U.S. Embassy in Moscow transmitted a report that recounted a lavish three-day wedding of a politician’s son in Makhachkala, a city on the Caspian Sea in the Russian Republic of Dagestan.

The cable was one of several hundred published by Wikileaks in recent weeks (more than 250,000 will be released in all) and received considerable attention in the West for its literary merit and in Russia for its claims about political largesse. The writer described the celebration in detail: Expensive vodka flowed as armed guests showered dancers with $100 bills and went “jet-skiing-under-the-influence.” More than 1,000 guests attended, including a drunken Olympic wrestler, a nanophysicist and Ramzan Kadyrov, the controversial president of Chechnya, who allegedly wore a gold-plated automatic handgun and presented the married couple with a 5-kilo lump of gold.

San Diego County makes a cameo in the cable: The State Department official noted the groom’s father’s U.S. interests. The dad, Gadzhi Makhachev, is an oil man and a politician who at the time served as the equivalent of a senator in the Russian Duma.

“His dealings in the oil business— including close cooperation with U.S. firms—have left him well off enough to afford luxurious houses in Makhachkala, Kaspiysk, Moscow, Paris and San Diego, and a large collection of luxury automobiles, including the Rolls Royce Silver Phantom in which [his son fetched his fiancé] from her parents’ reception,” the cable says. “He has sent Dagestani youths, including his sons, to a military type high school near San Diego….”

Makhachev, now Dagestan’s permanent representative in Moscow, denied many of the claims, telling a Kavkaz-Uzel newspaper reporter that only 200 attended and Kadyrov was not among the guests.

He also stated: “I don’t have homes in Moscow, Paris and San Diego and I never traveled in a Rolls Royce.”

A CityBeat investigation has found Makhachev is tied to at least five properties in San Diego County, and a local builder says he personally rode in Makhachev’s Rolls Royce. Makhachev has paid for 15 Russian boys to attend the Army & Navy Academy (ANA) in Carlsbad since the mid-1990s and recently made one of the largest donations in the boarding school’s 100-year history.

Further investigation reveals these deals were connected to Russian emigre, machinery exporter and Carlsbad developer Bernard Goldstein, who was indicted by a federal grand jury in November for allegedly hiding millions of dollars in overseas bank accounts. According to Russian reports, during the same time period, Makhachev helped negotiate business deals in Russia with Goldstein’s company, MG Export-Import. Goldstein has fled the country.

Neither Makhachev nor his “chief advisor” in Carlsbad responded to CityBeat’s calls and e-mails, but through public records, interviews, translation of Russian articles and fieldwork, the pieces begin to fall into place.

A 2007 photo in the Army & Navy Academy’s magazine shows Makhachev to be a stocky man with a thick mustache, barely taller than the cadets in ties and peaked caps posed with him. The rest of the page lauds Makhachev for donating $100,000 to the school to fund a wrestling center in the athletic building the school plans to build. Also pictured is Goldstein, whom Makhachev, in an announcement in the North County Times, described as a longtime friend.

“In Russia, an old expression is ‘The way to peace is through education.' This is our future, to put these kids together in a peaceful way,’ he told the reporter.

In the Russian press, Makhachev’s history is anything but peaceful. As head of the ethnic Avar national movement, he led militia forces against the Chechen invasion of Dagestan in 1999. He was shot in the arm in 2003 during a failed assassination attempt.

“Makhachev is a fascinating example of an ex-criminal, convicted in the Soviet times on petty racket charges, who went through the turbulent 1990s joining all possible political causes—from radical nationalist ones to radical Islamist—and eventually turning absolutely legit in modern Russia,” Nabi Abdullaev, a Moscow Times reporter who covered Dagestan between 1994 and 2001, writes in an e-mail to CityBeat. “He is a very talented politician, one of the best I know, with beastly natural instincts. All others with whom he had started as an equal as an ethnic leader in the 1990s are either physically dead or turned into nobodies.”

Makhachev achieved notoriety in 2000, Abdullaev recalls, when he kicked a Chechen rebel envoy in the crotch during the Parliamentary Assembly of the Council of Europe in Brussels. According to various Russian media accounts, in early 2003 Makhachev publicly claimed he had thousands of Dagestanis ready to travel to Iraq to fight against American soldiers should the U.S. invade Iraq. That was little more than bravado; no such militia formed.

“The 2003 story about Makhachev and support to Iraq was no more than a populist remark,” Abdullaev says. “He is a natural media pet and loves publicity.”

Nevertheless, it’s odd that a politician advocating for armed resistance against the U.S. military would simultaneously fund an American military school.

In an interview with CityBeat, ANA president Stephen Bliss, a retired Brigadier General in the U.S. Army, emphasized that the school’s only military link is through its Junior ROTC program. Although students are organized into Army ranks, the curriculum is “focused on citizenship and leadership, and no military skills are taught.” Most students do not join the military, he says.

“Until we received your inquiry, I personally didn’t know Mr. Makhachev’s relation with Army & Navy Academy was part of this Wikileaks thing—I’m just amazed,” he says. “The only thing I can tell you is in my personal dealings with this gentleman, I’ve had no reason to believe he was anything other than an upstanding and ethical guy and that his only focus was on the best interest of the Russian students he sent to the school.”

On the other hand, Bliss was alarmed to learn of Goldstein’s Nov. 16 indictment—Goldstein sits on the school’s board of trustees, though he has not attended a meeting in two years. Bliss says he plans to bring the information to the board for consideration.

Goldstein is charged with one count of conspiracy to defraud the IRS, five counts of filing false tax returns and three counts of failure to report foreign bank accounts. If convicted, he faces a maximum of 35 years in prison. Goldstein allegedly transferred millions of dollars to and from offshore bank accounts registered to fictitious businesses. He fled the U.S., and the case will progress in his absence, a Department of Justice spokesperson tells CityBeat.

Goldstein, who sponsored at least a dozen students himself, served as a sort of godfather to the Russian youths, Bliss says.

“Mr. Goldstein was a resident of Carlsbad, and so when these Russian students were here, he was one of the individuals who would check up on them and make sure they were doing OK,” Bliss says. Bliss says most of the students Makhachev sponsored (the current attendance fee is $31,950 per year) were the sons of deceased colleagues. According to the North County Times, Makhachev said they were the children of his co-workers, as well as one of his own sons.

At least one of the students—Leon Davydov—is the son of Valery Davydov, director of OJSC Dagneftegaz, a Russian gas company. Makhachev previously headed the corporation and served as chairman of the board as recently as 2007. According to Bliss, Davydov excelled at ANA, rising to battalion commander, the school’s highest rank. Davydov is now the school’s youngest trustee.

“I think Mr. Makhachev got a good return in terms of value, and I think someone like Leon Davydov is a good example,” Bliss says. “Guy comes to school here and ends up the No.

1 cadet. You can’t ask for more than that.”

But
Makhachev’s interest in Carlsbad extended beyond the school and into
properties and cars—and Davydov helped. The young man now bills himself
as Makhachev’s “chief advisor” in his online trustee biography.

Carlsbad-based
builder Ed Mullen says he rode in Makhachev’s Rolls Royce, despite the
politician’s denial that he owned such a car.

"He seemed to have unlimited money,” Mullen says.

“Whenever
he would come to town, he would buy a piece of property, or at least
make offers on them…. The first time he came, he bought a Hummer and
drove it one day. The next time, he bought a Mercedes 500 and drove it
one day. A Chrysler Crossfire, the same story, the next time.”

Mullen remembers that Makhachev didn’t speak a word of English and that Davydov served as his translator when Mullen helped Goldstein and Makhachev purchase homes and attempt to develop their jointly owned property.

In contradiction of Makhachev’s denial, records on file with the San Diego County Recorder / Assessor / Tax Collector show:

• Makhachev and his wife, Aminat
Sharipova, purchased a $743,000 home at 786 Grand Ave. in Carlsbad in
2003. It was recently painted sea-foam green with lavender window frames
and now displays signs for “Smechariki Day Care,” a reference to a
popular Russian cartoon. According to the California Department of
Social Services, the business does not have a day-care license.

• In 2005, Makhachev’s wife purchased a $500,000 property in the Marina Park Condominiums in Downtown San Diego.

• Makhachev’s daughter’s name
is on the deed for a $1million property at 130 Hemlock Ave. in
Carlsbad, one block from the beach. The building is also painted
sea-foam green and has a fire pit. Mullen says Makhachev used the
multi-unit property as his home when he was in San Diego. It is the
address used as the contact for the other two properties. Two companies
Davydov formed are registered to the address, and that’s where he is listed in the phone book.

• Through his wife, Makhachev owns
a stake in two $470,000 properties in Carlsbad—363 Carlsbad Village
Drive, a pink house (in a commercial area) with a broken front fence
that has long been a mystery to neighbors, and 354 Oak Ave., a gray
house with a fence and a large “No Trespassing” sign. Sharipova owns 33
percent of the two back-to-back properties, and Abdoulkhalik Gindiev,
general director of Rosneft-Dagneft, the sister company to Dagneftegaz,
owns another third (Gindiev also turned up in the Wikileaks cable
complaining about Moscow interference in Dagestan politics). The other
third is held by Goldstein’s family trust.

According
to Mullen, Bernstein and Makhachev wanted to aggressively develop the
entire block but never followed through. At one point, Mullen says he
assisted Makhachev in an attempt to donate a pier to the city of
Carlsbad. That also went nowhere.

“Everything was strange dealing with these guys,” he says. “But it ended up not being productive.”